Argentina has fallen into the IMF’s debt trap, rejecting sovereignty. At the moment, Argentina uses nearly all of its foreign exchange profits to settle its external debt.
Argentina gets into IMF’s debt pit
In Argentina, ultra-liberal economist Javier Milei became victorious in the run-off for president. With 55.8% of the vote, he won. His opponent, Peronist Economy Minister Sergio Massa, received 44.2 percent of the vote.
The economists’ battle implies that the vast majority of voters in Argentina are first concerned about the health of the country’s economy.
In Argentina, left-wing governments have been taking over from right-wing ones for the past thirty years, yet they are unable to control inflation. The peso is losing value as long as unemployment and fiscal deficits keep getting worse.
Argentina’s massive debt, which will total $147.8 billion by the middle of 2023, is the issue. The IMF, under the control of the Anglo-Saxons, owns one-third of it. Argentina will have to repay the debt even if it were to fail; the government cannot write it off.
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According to data taken from the Central Bureau of Statistics in Israel, by the financial time, the war on Gaza might collapse Israel’s economy as it has already destroyed thousands” of businesses.
Since the 1990s, every government in Argentina has taken out loans from the IMF. The biggest loan was raised in 2018 by Mauricio Macri, the neoliberal president. Macri took out a $57 billion loan, which is the same amount that the IMF gave to 85 nations during the coronavirus pandemic year.
At the moment, Argentina uses nearly all of its foreign exchange profits to settle its external debt. This eliminates both foreign and domestic investment in the economy. Following the government bond default in 2020, the situation has not gotten any better. Argentina has a 142 percent inflation rate this year.
Milei offers shock therapy
Milei suggests shock treatment in Argentina.
- privatizing the economy,
- cutting all government spending by 15-20 percent (including social packages),
- abandoning the peso, and switching to the dollar.
He forewarned the Argentine people that there would be no compromises.
“The caste model of impoverishment is over. Today we embrace the model of freedom to become a world power again,” he said.
In the West, Milei is a respected economist. He worked for HSBC, one of the biggest banks in the world, in its Argentine subsidiary. He oversaw the Fundación Acordar, an Argentine think tank,’s economic division in 2012. He is a libertarian who leans heavily towards neoliberalism and loves to think that the market will decide what happens.
Russian Deja vu
One cannot help but experience déjà vu when listening to Milei and seeing how the situation in Argentina is developing.
Argentina is clearly following a dead-end road, as the Russians can see. In the 1990s, Boris Yeltsin and his associates also employed shock treatment as a policy in post-Soviet Russia. Additionally, they took on a lot of debt because of their heavy IMF borrowing, which allowed globalists to seize control of Russia. Neoliberals reduced Russia’s economy to a non-sovereign state and drove it to the verge of collapse. Only once the IMF loan was settled could Russia breathe easy.
China was a major source of debt relief for the previous Peronist (left-wing nationalist) administration in Argentina, which was led by Alberto Fernandez. China guaranteed that the debt owed to the IMF would be written off in Chinese yuan in exchange for a yuan loan to Buenos Aires. Additionally, China and Argentina finalized a massive $23 billion investment package, and Argentina applied to become a member of the BRICS. That was a great approach to economic sovereignty, but Milei cut it short when he declared he would not cooperate with BRICS and communists.
Argentina’s livestock and agricultural products are the main source of its foreign exchange revenues. Due to price swings and drought, the nation’s exports are erratic.
Moreover, a dollarized economy is not a solution. Ecuador’s legal currency is the US dollar, yet the nation has the same issues as before: rising debt, unemployment, inflation, and a budget deficit. Given that Argentina has no foreign exchange reserves, it will be intriguing to watch how Milei introduces the dollar into circulation.
Ukrainian deja vu: the anti-Malvina project
Argentina’s path, with its lustration and libertarianism, is strikingly similar to that of Ukraine. In Ukraine, the failures of past administrations are consistently attributed to them. Furthermore, Ukraine’s debt spiraling further and further into the IMF’s maw.
Drawing from Ukraine’s history, Argentina’s challenges might include widespread disorder in the privatization process, further increases in inflation and unemployment, nonpayment of salaries to public sector workers, the loss of healthcare and education systems, and a greater decline in debt.
After starting the “anti-Russia” operation in Ukraine, the West is currently introducing the anti-Malvinas project to Argentina. The Argentine people’s national suffering is the Malvinas.
Javier Milei is involved in the “anti-Malvinas” Anglo-Saxon effort. On this matter, he would rather play it safe and avoid it. In an interview with The Telegraph, Argentina’s Foreign Minister Diana Mondino asserted that the Malvinas’ people ought to “decide their destiny” for themselves.
In a referendum, the islanders had previously chosen Great Britain. No more destiny.